What is fractional ownership?

Author
MyProperty
South Africa's #1 independent property portal

Fractional ownership is shared ownership and shared usage of an asset such as property.

In real estate fractional ownership often relates to a leisure property which is purchased by a group of shareholders. Shareholders thus own the property together and usage and all costs are shares in relation to percentage shareholding. Usage of the property is usually allocated to the shareholders (owners) by means of an ownership usage roster and running costs are divided amongst the shareholders.

A buyer physically acquires a percentage shareholding in a company, usually a private company that owns the property. You receive a share certificate and the ownership form allows you the use of the property on a certain number of allocated weeks depending on your shareholding. In most cases fractional ownership opportunities provide for a 13th shareholding in the relevant property, thus allowing 4 weeks usage per annum, on a rotational basis.

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